The Inside Agenda Blog

The Biggest Gamble of All

by Steve Paikin Wednesday April 16, 2014

Dalton McGuinty's appearance on "The Agenda" in advance of the 2007 election.

Do you remember the election campaign of 2003?

Dalton McGuinty, then the opposition leader, looked into the cameras and promised in an oft-played ad not to raise your taxes. He even, at a lavish ceremony, signed a Canadian Taxpayers Federation pledge not to do so. Then, he got into power, saw how big the deficit was, saw what his election commitments were, and changed his mind. Taxes were raised to pay for the improvements to health and education he wanted to make.

In the lead up to the 2007 election, McGuinty similarly committed not to raise taxes. "You know I won't," was his promise. McGuinty was re-elected, partly on the strength of the health and education improvements his government delivered.

But during his 2007 mandate, McGuinty again raised taxes, albeit with extenuating circumstances. McGuinty's provincial Liberal government and Stephen Harper's federal Conservative government harmonized their respective sales taxes into a new HST. Yes, Ontarians got some tax cuts in the short run. But they're also, in the long run, paying a higher sales tax on haircuts and music lessons, which used to be exempt from provincial sales taxes. 

And yet again, McGuinty and the Liberals won the ensuing election in 2011. In fact, they may be the only government in the Western world to implement such a significant change in taxes, and yet win re-election notwithstanding.

One of the lessons Ontario's 24th premier took from these policy accomplishments was that Ontarians will reward you politically, even if you raise their taxes, if you can convince them it's in the public interest and can demonstrate how their lives are better as a result.

Premier Wynne and Transportation Minister Glen Murray discuss "Moving Ontario Forward"

Kathleen Wynne is now going for the trifecta.

In the face of considerable opposition (mostly from the Conservatives), Wynne is set to announce in the May 1st budget that she'll call on some Ontarians to pay more tax than they're currently paying, in order to fund her government's $29 billion, 10-year "Moving Ontario Forward" infrastructure plan.

Conventional wisdom says, it's the biggest political gamble a Liberal leader could take, increasing taxes for yet a third time. But as Wynne said in her speech to the Toronto Region Board of Trade on Monday, "I made a commitment that I did not want a future premier to have to stand here 50 years from now, wishing someone had shown the courage and leadership to take action."

Wynne has confirmed not everyone will feel the pinch to get more infrastructure built. For example, there will be no increase in the HST, gas taxes, or income taxes on middle or lower income people. Left unsaid, but certainly implied, is that taxes will go up on corporations and higher income Ontarians. And Wynne clearly suggested that it would be political suicide to increase taxes on people outside Toronto to pay for the Greater Toronto Area's new transit needs.

"No one in London or Sudbury will be expected to pay for projects in Toronto," she said.

So now we wait for the May 1st budget in which Finance Minister Charles Sousa will finally get specific and lay out which "revenue tools" the province will choose, having already rejected so many.

Wynne is clearly content to put the Liberals' future on the line with this third attempt in a decade to raise more revenue. In fact, she almost dared her opponents to reject the budget, saying "If the opposition won't support us, then I am happy to take our plan to the people."

If that happens, Ontarians will have a good and clear choice. Wynne's transportation plan with its concomitant "revenue tools;" a Conservative transit plan which leader Tim Hudak insists can be achieved without any new fees or taxes; an NDP plan, which the party has strategically declined to roll out yet, presumably out of fears that it would be stolen or overly criticized; and the Greens who have been specific for years on the need to build more public transit, and pay for it by taxing behavior we don't like, such as polluting and smoking.

We'll have more to say about all of the above tonight on the broadcast at 8:00 p.m. and again at 11:00 p.m. as we debate how the government can pay for its promises on transportation and discuss the politics of budget-making. 

Tonight's guests include: Carol Wilding of the Toronto Region Board of Trade...

...Cherise Burda of the Pembina Institute...

...and the new CEO of CivicAction, Sevaun Palvetzian.

Related: The Mission vs. The Past